We are all too aware that the economy is in deep trouble. This week BankservAfrica’s index of net salary payments for June showed that 20,7% fewer salary payments were made in June, compared to last year. It means a loss of income, and of jobs, and a massive shock to demand. Business needs rescue, yet I want to ask, what can business do to help?
If you can still pay wages, you can help to keep your workers out of the hands of loan sharks. The Old Mutual Savings and Investment Monitor shows that more households have had to take personal loans from banks and micro-lenders. Due to the impact of the pandemic and lockdown, 42% of households in their sample have children and elderly parents to support. As an alternative to the microloan that gets someone to the next payday, former Springbok Bryan Habana and entrepreneur Deon Nobrega have launched the Paymenow Group’s Smart Wage platform. It partners with companies to give workers an advance portion of their earned salary in exchange for a fee per transaction. The loans are only a few thousand rand and are repaid through automatic deductions on the next salary date. It is not a longterm solution, but helping someone to avoid micro-loan interest rates is a step forward.
Business can also partner in community initiatives. Zlto is a digital rewards app that allows users, often unemployed youth, to earn “income” for performing micro-tasks. Nafisa Akabor explains in BusinessLive that such tasks include skills training and community outreach. During the lockdown, this also included giving out food and helping people apply for grants. Blockchain technology is used to validate activities through smart contracts and users build up a CV of work done that is stored on the blockchain. The Zlto’s (R1 equals 3 Zlto) can then be used for purchases at partner stores. Maybe a business community can work to bring Zlto to them?
There is something similar but different in community currencies. The Hustle tells the story of how the town of Tenino in Washington State is trying to keep spending local and support small businesses with its own currency. It started with a small fund aimed at supporting residents that live below the poverty line. Their small stipends are printed on wooden notes that almost all the businesses in town accept. Twice a month the businesses can submit redemption requests to turn the notes into cash. Not all community currencies end up saving local economies, but there are a few success stories that show it can benefit the economically marginalised.
And those are only a few ideas. If we are going to dig out of the Covid-19 hole, I believe that it is businesses that are going to do it.